"Dealing with @LindseyGrahamSC and many members of Congress, including Democrats, about imposing powerful Sanctions on Turkey," he said on Twitter, referring to the loyal ally who lambasted him last week.

"Treasury is ready to go, additional legislation may be sought. There is great consensus on this. Turkey has asked that it not be done. Stay tuned!"

Loading

A US official speaking anonymously told Reuters sanctions were "being worked out at all levels of the government for rollout".

Trump is struggling to quell harsh criticism, including from some of his staunchest Republican backers, that he gave Turkish President Tayyip Erdogan a green light to attack the Kurds last Sunday when he decided to pull a small number of US troops out of the border area.

Turkey's offensive aims to neutralise the Kurdish YPG militia, the main component of the Syrian Democratic Forces and seen by Ankara as a terrorist group aligned with Kurdish insurgents in Turkey.

But the SDF has also been Washington's key ally in fighting that has dismantled Islamic State's jihadist "caliphate" in Syria.

Trump's decision, rooted in his long-stated aim to get the United States out of "endless wars," has prompted bipartisan concerns that it opens the door to the revival of Islamic State.

While sanctions appear the strongest tool of deterrence, the United States and its European allies could also ponder arms sales bans and the threat of war crimes prosecutions.

Loading

It is unclear what sanctions have been drafted, which Mnuchin says are ready for activation at any moment, or how severe they are.

France has already announced it is halting exports of any arms to Turkey that could be used in its offensive against Kurds in Syria while Germany's foreign minister has announced it will curtail its arms exports to Turkey.

Turkey's Foreign Ministry says it will retaliate against any steps to counter its efforts to fight terrorism.

Reuters, AP